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Question
___________ debentures are which create a charge on the assets of the company, thereby mortgaging the assets of the company.
___________ debentures are which create a charge on the assets of the company, thereby mortgaging the assets of the company.
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Solution
The correct option is D Secured
Secured debentures are debentures secured by a charge on the fixed assets of the issuer company. For instance, mortgage debentures secured on land of the company. When the issuer company fails on payment of either the principal or interest amount, the assets of the company can be sold to repay the liability to the investors.
Secured debentures are debentures secured by a charge on the fixed assets of the issuer company. For instance, mortgage debentures secured on land of the company. When the issuer company fails on payment of either the principal or interest amount, the assets of the company can be sold to repay the liability to the investors.
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